KUALA LUMPUR, Aug 2 — The ringgit continued its downtrend to close lower against the greenback today, along with other emerging currencies, as concern over the global economic outlook resulted in more investors shifting towards the safe haven, an analyst said.
At 6pm, the local note weakened to 4.5400/5450 against the US dollar compared with 4.5175/5200 at Tuesday’s close.
A dealer said most Asian currencies are weaker against the US dollar today, led by the Korean won, as a Fitch Ratings downgrade of US sovereign credit spurred risk-off and haven bids.
The US was stripped of its top-tier sovereign credit grade one level from AAA to AA+, echoing a move made more than a decade ago by S&P Global Ratings.
In a statement, Fitch said tax cuts and new spending initiatives coupled with multiple economic shocks have swelled budget deficits, while medium-term challenges related to rising entitlement costs remain largely unaddressed.
“The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades,” it said.
The ringgit also traded lower against a basket of major currencies.
It dropped against the Japanese yen to 3.1824/1861 from 3.1666/1686 yesterday, weakened versus the euro to 4.9831/9886 from 4.9584/9612 and declined vis-à-vis the British pound to 5.7994/8085 from 5.7892/7924 previously.
At the same time, the local unit traded mostly lower against other Asean currencies.
The ringgit went down versus the Singapore dollar to 3.3944/3984 from 3.3872/3893 at the close on Tuesday but rose vis-à-vis the Philippine peso to 8.22/8.24 from 8.24/8.25 previously.
It depreciated against the Indonesian rupiah to 299.1/299.6 from 298.8/299.1 on Tuesday and was lower against the Thai baht at 13.2504/2716 from 13.1852/1982 previously.
— Bernama
